Mumbai, Oct 27 : Gold prices declined on Monday after posting their first weekly loss since mid-August, as hopes of a trade deal between the United States and China reduced demand for safe-haven assets.

The fall also came after a sharp rally in gold prices in recent weeks, which analysts said had gone 'too far, too fast.'

MCX gold prices opened 0.77 per cent lower at Rs 1,22,500 per 10 grams on Monday, compared to the previous close of Rs 1,23,451.

Similarly, silver prices on the MCX began the day 3.09 per cent lower at Rs 1,42,910 per kg, against the previous close of Rs 1,47,470.

During the early trade, gold futures on the MCX were trading down by Rs 1,088, or 0.88 per cent, at Rs 1,22,363 per 10 grams, while silver futures slipped by Rs 1,130, or 0.77 per cent, to Rs 1,46,340 per kg.

Spot gold slipped 0.7 per cent to $4,083.92 an ounce in Singapore, after touching a low of nearly $4,065 earlier in the session.

Last week, gold prices dropped 3.3 per cent, ending a strong rally that had pushed the metal to a record high of over $4,380 an ounce just a week ago.

The decline came as US and Chinese officials signaled that they were close to finalising a comprehensive trade agreement.

President Donald Trump's visit to the region for diplomatic talks has raised expectations of a breakthrough deal, which could ease geopolitical tensions that have been supporting gold prices in recent months.

Analysts noted that the recent pullback was largely due to profit booking, as investors who benefited from gold's steep rise since August chose to lock in gains.

Despite the correction, gold remains up more than 55 per cent this year, supported by central-bank purchases and investor concerns over rising government deficits and weakening currencies.

"Gold prices continue to decline as safe-haven demand weakens amid optimism over a potential US'China trade deal and a stronger US dollar,' analysts said.

'This week is a crucial one for the bullion market, with key events including meetings between US President Donald Trump and Chinese President Xi Jinping, a US Federal Reserve announcement, and several major tech company earnings reports,' they added.

/IANS